The bill H. 4216 proposes significant changes to South Carolina's income tax structure. It aims to amend Section 12-6-510 to establish a flat income tax rate of 3.99% for individuals, estates, and trusts starting from taxable years after 2025. Additionally, it introduces a phased reduction of the top marginal tax rate, which will decrease from 6.5% in Tax Year 2022 to 6% in subsequent years, contingent on projected increases in general fund revenues. The bill also includes provisions for further reductions in the income tax rate down to 2.49% if certain revenue thresholds are met, ensuring that any reductions are permanent and cumulative.

Furthermore, the bill amends several sections of the South Carolina Code, including Section 12-6-50, which will no longer adopt the federal standard and itemized deductions. It introduces a South Carolina Income Adjusted Deduction (SCIAD) in Section 12-6-1140, with specific deduction amounts based on filing status, and outlines conditions under which these deductions may be reduced based on income levels. Other amendments include conforming changes to filing requirements and adjustments for nonresident individuals. The bill is set to take effect upon the Governor's approval and will first apply to tax years beginning after 2025.

Statutes affected:
03/25/2025: 12-6-510, 12-6-50, 12-6-1140, 12-6-4910, 12-6-1720
03/27/2025: 12-6-510, 12-6-50, 12-6-1140, 12-6-4910, 12-6-1720
04/02/2025: 12-6-510, 12-6-50, 12-6-1140, 12-6-4910, 12-6-1720
Latest Version: 12-6-510, 12-6-50, 12-6-1140, 12-6-4910, 12-6-1720